Knock-on effect of non-manufacturing regulation on manufacturing sectors efficiency and productivity

Since the mid of nineties European countries are registering an anemic growth of economic activity, in large part due to the dynamic of productivity. In 2010 the European Council adopted a new Agenda, Euro2020, which aim is to boost growth also improving European competitiveness. Regulation is one of the main factors influencing competitiveness. This paper focuses on the determinants of Total Factor Productivity (TFP) growth in 13 manufacturing sectors in a panel of 18 OECD countries from 1975 to 2007. Using the Stochastic Frontier Approach applied to the EU-KLEMS and OECD’s Regulation Impact Indicator database I found that, given the strong negative relationship between regulation and Technical Efficiency, which is one of the drivers of TFP, countries with still tight regulation in services could/should reduced it in order to improve their economic performance without detriment for public finances.Total Factor Productivity, Technical Efficiency, Competition, Regulation, Stochastic Frontier.

Potential Output, Output Gap and Fiscal Stance: is the EC estimation of the NAWRU too sensitive to be reliable?

EU fiscal governance builds on the concept of Potential Output, the highest level of production an economy can sustain without incurring in inflationary pressure. Unfortunately, Potential Output is not observable and must be estimated. There are many techniques to obtain a guess value of the potential of an economy, each of which with pros and cons. The methodology adopted by the European Commission and EU Member States, while consistent with most of the recent economic and econometric theory, is still not robust enough to give a unique and irrefutable measure on which to base EU’s fiscal framework. Should the fiscal governance continue to be based on this concept, further extension of the methodology must be implemented in order to obtain more robust estimates

Knock-on effect of non-manufacturing regulation on manufacturing sectors efficiency and productivity

Since the mid of nineties European countries are registering an anemic growth of economic activity, in large part due to the dynamic of productivity. In 2010 the European Council adopted a new Agenda, Euro2020, which aim is to boost growth also improving European competitiveness. Regulation is one of the main factors influencing competitiveness. This paper focuses on the determinants of Total Factor Productivity (TFP) growth in 13 manufacturing sectors in a panel of 18 OECD countries from 1975 to 2007. Using the Stochastic Frontier Approach applied to the EU-KLEMS and OECD’s Regulation Impact Indicator database I found that, given the strong negative relationship between regulation and Technical Efficiency, which is one of the drivers of TFP, countries with still tight regulation in services could/should reduced it in order to improve their economic performance without detriment for public finances

Knock-on effect of non-manufacturing regulation on manufacturing sectors efficiency and productivity

Since the mid of nineties European countries are registering an anemic growth of economic activity, in large part due to the dynamic of productivity. In 2010 the European Council adopted a new Agenda, Euro2020, which aim is to boost growth also improving European competitiveness. Regulation is one of the main factors influencing competitiveness. This paper focuses on the determinants of Total Factor Productivity (TFP) growth in 13 manufacturing sectors in a panel of 18 OECD countries from 1975 to 2007. Using the Stochastic Frontier Approach applied to the EU-KLEMS and OECD’s Regulation Impact Indicator database I found that, given the strong negative relationship between regulation and Technical Efficiency, which is one of the drivers of TFP, countries with still tight regulation in services could/should reduced it in order to improve their economic performance without detriment for public finances

The Econometrics of the EU Fiscal Governance: is the European Commission methodology still adequate?

Following the 2005 regulations emending the Stability and Growth Pact with the introduction of country-specific objectives in structural terms, the EU fiscal governance is based on the concept of Potential Output, the highest level of production an economy can sustain without incurring inflationary pressure. Potential Output is an unobservable quantity and, for this reason, it must be estimated. There are many techniques to obtain an estimate of the potential of an economy, each of which with pros and cons. The methodology adopted by the European Commission and EU Member States, while consistent with most of the recent economic and econometric theory, is still not robust enough to give a unique and irrefutable measure on which to base EU’s fiscal framework. In this paper, we challenge the EC's approach showing its failure to adequately capture the relation between inflation and cyclical unemployment, the Phillips curve, in estimating the trend unemployment. Should fiscal policy continue to be based on this concept, further extension of the methodology must be implemented in order to obtain more robust estimates

The Econometrics of the EU Fiscal Governance: is the European Commission methodology still adequate?

Following the 2005 regulations emending the Stability and Growth Pact with the introduction of country-specific objectives in structural terms, the EU fiscal governance is based on the concept of Potential Output, the highest level of production an economy can sustain without incurring inflationary pressure. Potential Output is an unobservable quantity and, for this reason, it must be estimated. There are many techniques to obtain an estimate of the potential of an economy, each of which with pros and cons. The methodology adopted by the European Commission and EU Member States, while consistent with most of the recent economic and econometric theory, is still not robust enough to give a unique and irrefutable measure on which to base EU’s fiscal framework. In this paper, we challenge the EC's approach showing its failure to adequately capture the relation between inflation and cyclical unemployment, the Phillips curve, in estimating the trend unemployment. Should fiscal policy continue to be based on this concept, further extension of the methodology must be implemented in order to obtain more robust estimates

Building the core of the Istat system of models for forecasting the Italian economy: MeMo-It

10noopenThis paper provides a description of Istat’s new Macroeconometric Model MeMo-It. This is the tool used by Istat to produce bi-annual medium-term forecasts of the Italian economy since May 2012. The key model’s features are illustrated and compared with other modeling approaches used in the literature. The paper describes the theoretical foundations of the model along with the set of equations and their estimation. It also presents an assessment of model’s performance by focusing on the key multipliers.openBacchini, Fabio; Brandimarte, Cristina; Crivelli, Piero; De Santis, Roberta; Fioramanti, Marco; Girardi, Alessandro; Golinelli, Roberto; Jona-Lasinio, Cecilia; Mancini, Massimo; Pappalardo, CarmineBacchini, Fabio; Brandimarte, Cristina; Crivelli, Piero; DE SANTIS, Roberta; Fioramanti, Marco; Girardi, Alessandro; Golinelli, Roberto; JONA-LASINIO, CECILIA SUSANNA; Mancini, Massimo; Pappalardo, Carmin